The Effectiveness of HRIS:
How Technology can Increase Productivity at Work
Nicole R. Forman
Rutgers University
Abstract
Human Resource Information Systems (HRIS) are analyzed to see how effective the use
of technology is within the workplace. The measures used in this paper to analyze HRIS are
through increased productivity and technology capabilities. HRIS is strategic and can increase
productivity by managing human capital and employee engagement. Alternatively, technology is
another strategic focus of HRIS because factors like interface compatibility, software, and data
storage play an essential role for an organization. This study uses three well-known HR software
companies to analyze how effective HRIS is in business. The three companies used in this study
are Oracle, ADP, and SAP. The findings provided through analysis demonstrate that HRIS is
effective in managing and increasing productivity among employees only if the technology is
current. Findings demonstrate that data storage and interface compatibility are the top reasons
that contribute to the effectiveness of HRIS. With the implementation of successful HRIS the HR
staff is able to grow the business by managing human capital and engaging the employees. The
findings demonstrate that the leading companies in the HRIS industry value human capital
management, employee engagement, and data storage capabilities the most. The limitation found
in this study is the small sample size, which might not accurately represent the company values.
Introduction
Technology has impacted the way the world does business both internally and externally.
Organizations today can conduct their business routines from different geographical locations
around the world through technology use. Communication technologies enable employees to
exchange information with management and colleagues, however there is a focus on the
technology used to manage employees. Employee communication is vital for business because it
creates rules, norms, roles, and behaviors that are needed to continue daily business practices.
The Human Resources department is the overseer of the organization that provides a link
between employees and management (bls.gov). HR professionals are responsible for strategic
planning, performing of ongoing evaluations of recruits, hiring new employees, training
employees, billing and record keeping, and meeting the goals and objectives the company
requires (Prochaska, 2006).
Working in HR requires professionals to posses proprietary integrated information
systems called Human Resource Information Systems (HRIS). These systems store personal and
company data, which includes: employee benefits, risk management services, payroll, payroll tax
administration, and regulatory compliance management (Edwards, 2014). The focus of this paper
will be the internal communication technologies that the Human Resource departments use as a
means to share important information with employees.
Background/Literature Review
Technology
There are two important terms to know in this technology age for the human resources
profession, e-HR and HRIS. E-HR is the transition from the traditional human resource methods
to an HR web-based technology service. It is important for HR Professionals to not only have
HR skills and knowledge, but also have the ability to apply them with technology. Human
Resource Information Systems (HRIS) are the integration of hardware and software, which are
used to implement an e-HR approach (Johnson & Gueutal, 2011). HR technology is primarily
used for recruiting, hiring, training, performance management, and compensation and benefits
administration. The overall goal of HRIS is to provide a way to plan, control, and manage
employees and costs through easily accessible information (Prakash & Patawari, 2014).
Human Resources is evolving into a technology-based profession because organizations
consider HRIS strategic; it allows HR professionals to become more productive and profitable
than those who do not use Human Resources Information Technologies (HRIT). HRIT is
essentially the combination of the two fields of HR and IT, that come together and create a way
to be more efficient while meeting the challenging demands of managing (Long, 2009). The
main reason companies implement HRIS is to become more competitive by reducing
administrative costs, competing for global talent, improving service and access to data for
employees and managers, and analyzing trends to make effective decisions. HRIS is a
fundamental strategy to make business more competitive (Johnson & Gueutal, 2011). According
to Long (2009) human resource technologies are what make managing a company successful.
However, HRIS is only successful if it is implemented properly. Important features of HRIS that
companies are concentrating on are interface compatibility, and storage and access components
of technology.
An interface is a device that is shared with other computer applications across which data
or information flows (Powell & Dent-Micallef, 1997). Interface compatibility is an important
feature that organizations needs to think about when transforming to an e-HR approach of
managing. Employees are all working with different technologies based on what their job role is,
adding more technologies to their lives that all have different interfaces can be difficult. It is time
consuming for both employees and management because it requires training and successful
adaption. Additionally, Prakash & Pratawari (2014) found that there is a resistance against HRIS
by staff due to a discomfort with change. It is highly recommended that management quickly
takes action and provides training services before implementing new software to prevent this
resistance. Having compatible interfaces makes it easier for employees to use the technology and
also reduces confusion among managing software.
Data storage is another feature of HRIS that is significant to the competitive advantage
that HR technologies provide. HR data is rapidly expanding to provide instant access to data by
groups that are inside and outside of the organization (Johnson & Gueutal, 2011). Internal
workers, such as employees, have access to their personal data but also do managers, health
insurers, workers compensation carriers, and regulatory agencies. When implementing strategic
plans to incorporate HRIS, finding software that allows fast and accessible data storage is
important. Cloud data storage provides faster and cheaper ways to store HR-data. Although there
are many advantages to using the cloud for data storage, there are also disadvantages. One
disadvantage for cloud storage is that since it is relatively new there is a risk for confidential
information to be compromised. However, Clark (2015) argues that new cloud technology is
actually more secure than traditional forms of storing data.
Increased Productivity
The purpose of implementing human resource information technology is to increase
productivity within the workforce by eliminating mundane administrative tasks with fast and
efficient software. According to Prakash & Pratawari (2014), HRIS effects efficiency and
effectiveness by reducing time for processing paperwork, increased data accuracy, and faster
decision making. By using HRIS as a way to eliminate these administrative tasks, it becomes
strategic for the business. Companies that use HRIS are strategic because they are able to spend
more time and energy on the employee. This technology enables the HR staff to spend their time
building relationships with the employees of the organization to make them feel important,
motivated, and satisfied. Engaging with employees builds a company with a higher competitive
advantage.
Human Capital Management & Employee Engagement
Human capital management (HCM) considers an employee of an organization as an asset
that can have value to the organization, which is enhanced through investment. HR managers are
responsible for managing the costs of their workforce in order to maintain a competitive
advantage. If an employee is not engaged and not contributing the organization they are seen as
an expense to the company. Human capital management seeks to effectively manage these
expenses through the five following functions; payroll, employee benefits administration, human
resources administration, time and labor management, and talent management. These five
functions are the key to calculating the cost of the organization’s workforce (ADP, 2015).
According to Vos & Dries (2013), a strategic organizational view of talent refers to the value and
uniqueness of an organization’s human capital. An employee’s value is what contributes to the
company’s competitive advantage, whereas, the uniqueness refers to the difficulty to replace the
current standing human capital. Employee engagement is also important for maintaining talent.
Research suggests that extensive benefits, competitive compensation, and job security help retain
employees in the organizations (Jiang, Lepak, Hu, & Baer year). This increases employee
engagement and the overall satisfaction of the workforce.
Research Question
In understanding the benefits of Human Resource Information Systems, it is important to
analyze the effectiveness of the software. Essential factors of implementing HRIS for a company
is to allow the HR department to spend more time growing the business by keeping employees
engaged and retaining human capital in order to remain competitive. However, for a company to
be competitive they must have certain features of HRIS that make the software more efficient.
This research looks at the leading HRIS companies to understand what their view is on effective
software for managing human resources.
RQ: What do the leading companies in the industry of HR view as effective for
human resource information systems (HRIS)?
Hypothesis 1: HRIS increases productivity by allowing HR to engage more
with the employees and increase employee satisfaction.
Hypothesis 2: The important features that companies look at when choosing
their human resource management software are interface compatibility and
data storage options.
Methods
The research represented in this study comes from analyzing three popular HR software
companies that promote productivity in the workplace. The three companies are Oracle, SAP,
and ADP. These companies are among the top and leading human resource software systems in
the United States; therefore, it is important to analyze how they communicate to the public about
news and issues in the field. The method used to evaluate the effectiveness of HRIS software in
this paper is by analyzing the company Twitters of ADP, SAP, and Oracle to see what issues
they raise the most.
Each company’s Twitter was analyzed by tedious coding methods to obtain the important
data. The first few tweets on each company’s page that had an external links to an article were
evaluated. After reading each article link a code was assigned to describe what the overall
message of the tweet was. After gathering enough data from each company on Twitter, there was
an additional coding procedure that involved super codes. Super codes are more specific and
differentiate what each overall message was specifically targeting. For example, a code that was
analyzed was technology, but a super code for that message was interface compatibility. Thus,
through the coding process a total of five important items continuously appeared; they were
human capital management, employee engagement, interface compatibility, data storage and
software.
Results
A total of 24 tweets were analyzed in this study, however, only 21 were found to be
consistent with the purpose of the research. After thorough analysis there is one overarching
theme among all of the company tweets, it is strategy. HRIS is effective because it is strategic,
which is demonstrated in two categories. The two main strategies regarding HRIS effectiveness
are Technology and Increased Productivity. This is an important finding because these HRIS
companies are sending messages to the public that emphasize the important role technology
plays in HR, but also how it can increase productivity. HRIS effectiveness is measured by
technology and increased productivity, which correlates to Hypothesis 1 and Hypothesis 2.
The three important factors of technology that were found in this study are software,
interface compatibility, and data storage. According to the data collected, Oracle’s Twitter
account featured the most information on data storage. Approximately 57% of their tweets were
in regards to the new technology, known as the iCloud, for data storage purposes. Alternatively,
SAP only mentioned data storage in 29% of their tweets and ADP did not share any information
on iCloud news. Software was only mentioned 14% by both Oracle and SAP, but not ADP.
Interface compatibility was only mentioned by SAP and it was only in 14% of the tweets that
were sampled. This data demonstrates that these companies each value different elements of
technology differently, which may be consistent with the way they each conduct business.
Increased productivity was measured using human capital management and employee
engagement. ADP shared 57% of their tweets with information in regards to human capital
management and 43% employee engagement. Oracle discussed human capital management in
29% of the tweets and did not mention any articles in relation to employee engagement. Lastly,
SAP only mentioned employee engagement and it was incorporated in approximately 43% of
their tweets.
In combining all of the data, these results demonstrate which elements of HRIS are the
most important. The sample provides a mix of equal percentages among many of the elements;
human capital management, employee engagement, and data storage were all mentioned in about
33% of the tweets from the three companies’ Twitter accounts. The items that were least
mentioned by these organizations were software and interface compatibility. Although these are
also important features of technology, currently iCloud storage is the most popular and new
technology that allows for a competitive advantage, therefore recent posts are targeting the new
trend.
Conclusion
This paper highlights the important strategies that make HRIS effective for human
resources and the overall business. The results from the sample of data demonstrates that the
most important features of HRIS are managing talent, engaging employees, and having software
that encompasses new iCloud technology capabilities. The leading companies in HRIS
concentrate on the importance of storage capacity, and employee engagement and management.
The only limitation that this study has is the random sample method that was chosen to evaluate
the company twitters. The study’s data was only a small representation of 7 tweets from each
company; overall there were 21 tweets that were coded and analyzed. Future research would
suggest for further analysis of these company social profiles by gathering more tweets.
Appendix
Figure 1: Codes from three companies (Oracle, SAP, and ADP) that discussed important topics
dealing with the effectiveness of HRIS on their online social profiles.
Effective HRIS
Strategy
Increased
Productivity
Human
Capital
Management
Talent
Technology
Software
Engagement
Costs
Employee
Satisfaction
Motivation
Interface
Compatibility
Data Storage
iCloud
Figure 2: Data that represents the number of times each company mentioned in a post from their
Twitter the importance of these items.
Company Tweets
Prioritizing Important Elements of HRIS
60%
50%
40%
HCM
Engagement
30%
Software
Interface
20%
Data
10%
0%
ADP
Oracle
SAP
Figure 3: This data represents the combined percentages of each HRIS strategy mentioned by
the three companies’ Twitter’s.
Strategies
Interface
1%
HCM
32%
Data Storage
33%
Software
1%
Engagement
33%
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Link to website: https://nrforman.wordpress.com